By evaluating long-term financial goals, buyers can turn festive opportunities into lasting investments

With the festive season ongoing in full swing, there is a surge in consumer spending. This time is often marked by a flurry of purchases fuelled by tradition and sentiment. While the allure of buying a home can be particularly enticing during this festive period, buyers must approach such decisions with careful consideration. They must look beyond the festive fervour and reflect on key aspects that can guide them to make informed decisions.

Decoding Festive Demand

As per a report ‘Unravelling the Trends Shaping India's Real Estate Market in 2024’ by CBRE, from January to September, the luxury housing category collectively constituted 16 per cent of the overall housing demand.

This growth has spurred developers to launch new projects, resulting in the category representing 19 per cent of the total new launches during the first nine months of 2024. This trend is only going to grow further spurred by the festive season as buyers are investing in end-products that offer better amenities such as club-house, larger living spaces, and modern facilities. Metro cities, in particular, have seen a wave of new project launches by developers this year, catering to various buyer segments.

While luxury properties grab headlines, the affordable housing sector remains the backbone of India’s real estate market as this is where buyers purchasing their first home find the most value.

Having said that, many first-time homebuyers are compelled to buy a property given the abundant promotional offers and incentives provided by realtors. It is so because the festive season spurs confidence as it often coincides with salary increments, bonuses, and a general uptick in economic activity. However, buyers much before they scout for a property, should evaluate the long-term aspects. Questions such as - "Can I support paying the EMI?" or "Is it the right approach" may seem overwhelming at first, but assessing one's worth is very crucial at this stage.

Interest Rate Matters

The interest rate set by the Reserve Bank of India (RBI) is a huge factor in deciding other crucial interest rates. The repo rate is unchanged for the 10th consecutive time, and this implies that the Equated Monthly Installments (EMIs) are likely to remain manageable. Further to this, I believe there would be a pickup in demand for housing loans as the festive season progresses. Recent data from the RBI reveals a remarkable 40 per cent increase in home loan deployment, highlighting the diminishing gap between monthly rents and EMIs. Additionally, 80 per cent of aspiring homeowners preferred home loans as the top choice for property acquisition this year.

Typically, possessions and property deliveries are scheduled in the latter half of November, aligning perfectly with the festive momentum.In addition to stable interest rates and EMIs, the array of offers and discounts available during the festive season can be another key factor of consideration. However, it’s essential to look for transparent offers that can help avoid hidden fees and unexpected costs. One should seek out reduced processing fees, flexible repayment plans, cashback schemes, and opportunities for negotiation that can make the festive season an advantageous time to invest.

What Should Buyers And Investors Do?

Investors and buyers must focus on long-term value by evaluating their income and cash flows to ensure manageable EMIs. The festive season can be an opportunity to reduce upfront costs and select properties in developing areas with strong amenities and connectivity for better appreciation.

The predictability in EMI outflows coupled with festive discounts can make the dream of homeownership more achievable. First-time buyers, particularly in the affordable housing segment, must rely on loans to bridge the financial gap as well as look for special offers and discounts.

While festive discounts are great, buyers should align their decisions with pragmatic goals rather than being swayed by just sentiment. Buying a property during a festive season is certainly the start of a prosperous journey, but to truly benefit, one needs to have a stable financial plan - whether it’s the first home or adding to one’s portfolio.

(The writer is MD & CEO, RHDFCL; views are personal)